982 F 2 D 693 1992 Nisha Sharma

982 F. 2 D 693; 1992 © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

§ Name of the parties: Computer Associates International Inc. (CA) Altai § Judges: ALTIMARI, MAHONEY and WALKER, Circuit Judges. © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

BACKGROUND OF THE CASE § CA is a Delaware corporation, with its principal place of business in Garden City, New York. § Altai is a Texas corporation, doing business primarily in Arlington, Texas. Both companies are in the computer software industry-designing, developing and marketing various types of computer programs. § Computer Associates (CA) created a job scheduling program called CA-SCHEDULER designed for IBM mainframe computers which sorts, runs, and controls the various tasks given to a computer. § CA-SCHEDULER contains a sub-program entitled ADAPTER, also developed by CA. § The IBM System 370 family of computers, for which CA- SCHEDULER was created, is, depending upon the computer's size, designed to contain one of three operating systems: ©DOS/VSE, Nisha Sharma, LL. M. , National Law MVS, or University CMS. Jodhpur [www. lawlex. org]

FACTS OF THE CASE § 1982: Altai began marketing its own job scheduling program entitled “ZEKE”. The original version of ZEKE was designed to run with a VSE operating system. § 1983: Altai decided to rewrite ZEKE so that it could run in conjunction with an MVS Operating system. § At that time, James William is an employee of Altai and Arney is a computer programmer who worked for CA and both had been co-workers in CA for sometime before William left CA to work for Altai’s predecessor. § Williams wanted to recruit Arney to assist Altai in designing the MVS version of ZEKE and was aware of both the CA- SCHEDULER and ADAPTER Programs but he had never seen the codes of either program. § While working for CA, Arney helped in improving the VSE version of ADAPTER and was permitted to take copy of ADAPTER’S source code. § 1984: Arney left for CA to work for Altai, at that time only he took the copies of the source code with him for both VSE and MVS versions of ADAPTER. § After that, William created VSE version of ZEKE, thought that approx 30% of his original program would©have to be. LL. M. , modified and. University decided to[www. lawlex. org] name this new component program “OSCAR”. Nisha Sharma, National Law Jodhpur

FACTS CONTD… § In 3 months, Arney successfully completed the OSCAR project. When finally settled, he had copied approx 30% of OSCAR’S code from CA’S ADAPTER program. § 1988: CA learned that Altai’s may have appropriated parts of ADAPTER. After confirming, CA secured copyrights on its 2. 1 & 7. 0 versions of CASCHEDULER. § Later, William started rewrite the OSCAR AND Arney was excluded from the process, and his copy of the ADAPTER code was locked away. § William put eight other programmers on the project, none of whom had been involved in any way in the development of OSCAR 3. 4. § The rewrite project was finished in 1989 and the resulting program was © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org] entitled as “OSCAR 3. 5”.

ISSUES § Whether OSCAR 3. 5 have substantial similarity to CA’S ADAPTER or not? § To what extent the non-literal elements are protected by the Copyright Law? © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

CONTENTIONS OF CA § CA contends that the District Court applied an erroneous method for determining whethere exists substantial similarity between computer programs or not? § It also contends that District Court erred in determining that OSCAR 3. 5 did not infringe the copyrights held on the different versions of its CASCHEDULER program. § Further, it asserts that test applied by the District Court sufficiently for a computer program’s non-literal elements. failed to account § It alleged that Altai misappropriated CA’s trade secrets by incorporating into ZEKE. § CA argues that, despite Altai’s rewrite of the OSCAR code, the resulting program remained substantially similar to the structure of its ADAPTER © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org] program.

CONTENTION OF ALTAI § Altai argued that S. 301 of the Copyright Act preempted CA’s state law cause of action. © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

HOLDING OF THE COURT § The court re-examined the District Court’s process and found no significant fault with it. After taking out all the functional elements from the public domain, only a few lists and macros in OSCAR 3. 5 were similar to ADAPTER and their impact on the program was not large enough to declare copyright infringement. § The court found that similarity in services required by the operating system was due to the nature of the operating system, thus it was not protected by the copyright. § Similarly, the flow charts were found to be an element dictated by the external factors are also not protectable by the copyright. § The court applied its new AFC (Abstraction Filtration Comparison) Test to the two programs and held that non- literal elements of Altai’s program were not substantially similar to the program copyrighted by the CA. So, Infringement was not found. § The court determined that the allegation of misappropriation was based on Altai’s use of the infringing material, therefore copyright infringement claim © Nisha Sharma, LL. M. , National Law University Jodhpurclaim [www. lawlex. org] preempted the misappropriation according to S. 301.

HOLDING CONTD… § The court found that the extra elements differentiate the trade secret misappropriation claim from the copyright infringement claim. The court vacated the district court's preemption ruling and remanded the case back to the district court. © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

AFC TEST § In determining whether copyright infringement existed, the Court took this opportunity to introduce a test, the Abstraction-Filtration-Comparison (AFC) test. The AFC test begins by breaking down the copyrighted software into its structural parts ("abstraction"). The portions in the public domain, incorporated ideas, and expression necessary to those ideas are filtered out ("filtration"). Finally, the court compares the residue of remaining creative expression to see if the protected elements are substantially similar to the allegedly infringing software ("comparison"). © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

© Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

© Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]

THANK YOU © Nisha Sharma, LL. M. , National Law University Jodhpur [www. lawlex. org]